Country enjoys strong growth
Economy shifts from crops to manufacturing and tech in the post-war years, writes Ed Peters
Forty years after the end of a war, which was one of the defining events of the 20th century, Vietnam is emerging as a force to be reckoned with in Asia and on the world stage.
Much of the country was laid waste by years of conflict; however, by adopting a succession of five-year development plans, Vietnam has made its way along the long road to recovery.
In August, Vietnam reached an agreement in principle with the European Union (EU) for a ground-breaking free-trade deal. The aim is to eliminate nearly all tariffs, which will gradually be liberalised over the next decade. The agreement also covers non-tariff barriers to trade such as public procurement, regulatory issues, competition, services, investment, intellectual property rights and sustainable development.
EU exports to Vietnam are mainly electrical machinery and equipment, aircraft, vehicles and pharmaceutical products. Vietnam's exports to the EU include telephone sets, electronic products, footwear, textiles and clothing, coffee, rice, seafood and furniture. Crucially, the EU has a negative balance of trade with Vietnam. Last year, EU-Vietnam trade in goods was worth more than Euro28.3 billion (HK$249 billion), with Vietnam dispatching Euro22.1 billion of goods and importing Euro6.2 billion worth in return.
One of the main spurs to concluding the free-trade agreement is the EU's role as one of the largest foreign investors in Vietnam. In 2013, EU investors committed a total of US$656 million in foreign direct investment, placing it as Vietnam's sixth-largest foreign investor partner.
Another landmark deal was the Trans-Pacific Partnership, anchored by the United States and opening the markets of a dozen Pacific Rim countries to each other. Vietnam, with its booming garment and shoe industries, is expected to be one of its big winners.
